He is currently overseeing a handover to Paul Niven, who is F&C’s head of multi-asset investments and manager of the Managed Growth and Diversified Growth funds.
Niven will prioritise running F&CIT, which he will take over on 1 July. While the other funds he runs are managed using a team appraoch, it will be reviewed by F&C whether he will continue to run them in due course.
F&CIT was the UK’s first investment trust, being launched in 1868. Tigue has been at its helm for the last 17 years and F&C admitted he will “be a difficult act to follow”.
Niven has been at F&C since its merger with ISIS 10 years ago, where he led the strategy team and had previously run Japanese investments and is described as a “macro-investor to the core, having previously led the asset allocation process on the various insurance and institutional mandates at F&C”.
It is expected there will be no change to the trust's investment approach and any changes Niven does make "will build on the success to date."
Welcome ownership stability
While F&C has acknowledged the upheaval comes at a sensitive time as it is currently under offer from Bank of Montreal, the trust’s board believes the acquisition will bring some “welcome ownership stability, which will be to the benefit of the clients and employees.”
Brewin Dolphin’s John Newlands, head of investment company research said: “Jeremy has provided years of sterling service to F&C both in steering the trust during a period in which some very volatile market phases took place
“At the same time it will be interesting to see what the incoming manager will decide to do with the trust. We believe it is very important that large global trusts such as F&C do create an identity that allows them to stand out from the others as well as deliver in performance terms.”
In December, F&CIT will conclude its loan repayments on £110m debenture stock, which should give Niven “a bit of a kick-start” as he takes over, Newlands added. The trust currently pays 2.1p per share or £12.38m a year in interest payments.
F&CIT has posted a three-year outperformance against its benchmark, the FTSE All World Index, reporting 26.44% NAV and a share price of 29.09%, while the index returned 23.42%.
The trust’s chairman Simon Fraser said: “Our investment trust peer group was also up 21% and the size weighted open ended fund average 22.6%. The biggest contributor to our own performance came from gearing into the rising markets. We suffered from being underweight in the US but outperformed that market by a wide margin.
Global diversification to continue
Niven’s track record shows underperformance compared with his multi-asset peer group composite, according to FE, which said: “Over a long track record, the manager has underperformed the peer group more often than not. Poor stockpicking has had a material downward effect on results, which have not been particularly exposed to falling markets.”
Niven has returned 8.7% over three years against the peer group’s average of 14.1%.
F&CIT has managed 44 years of consecutive dividend growth, with the total dividend for this year set at 9p, up 5.9% during the year. F&C IT will continue its global diversification throughout 2014 by reducing the trust’s UK exposure, 26% of the equity weighting at the end of January.
Tigue maintains other interests outside F&C, serving as an investment adviser to the BP and British Steel pension funds and chairman of Battle Againsit Cancer Investment Trust (BACIT Ltd).
